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T he I mportance O f I nherent R isk F actors : A uditors ‘ P erceptions
Author(s) -
Monroe Gary S.,
Ng Juliana K. L.,
Woodliff David R.
Publication year - 1993
Publication title -
australian accounting review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.551
H-Index - 36
eISSN - 1835-2561
pISSN - 1035-6908
DOI - 10.1111/j.1835-2561.1993.tb00370.x
Subject(s) - audit , audit risk , risk factor , accounting , risk management , risk assessment , accounts receivable , actuarial science , risk perception , inherent risk (accounting) , financial statement , business , factor analysis of information risk , listing (finance) , financial risk management , risk analysis (engineering) , perception , psychology , internal audit , computer science , external auditor , finance , risk management information systems , engineering , medicine , computer security , information system , management information systems , neuroscience , electrical engineering
This research project investigated auditors' perceptions of the importance of inherent risk factors in assessing inherent risk for accounts receivable and inventory. Sixty‐eight auditors completed a questionnaire listing 42 inherent risk factors and six control risk factors. The auditors were required to: identify whether each factor was an inherent risk factor; indicate whether the factor affected their assessment of inherent risk at the financial statement or account balance (class of transactions) level; indicate whether the factor was associated with high or low inherent risk; and assess how important the inherent risk factor was in their assessment of inherent risk. In general, the auditors perceived variables pertaining to the characteristics of management and the history of errors to be the major determinants of inherent risk.